Home News A Successful Economy Isn’t Just Capitalists Increasing Their Capital (It’s Your Life, Improving)

A Successful Economy Isn’t Just Capitalists Increasing Their Capital (It’s Your Life, Improving)

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Why Americans Put the Success of Capitalism Above Their Own Lives Falling Apart

If I ask the average American, “how do you think the economy is doing?” they will probably talk to me about unemployment rates, GDP growth, stock markets, and so on. They might even refer, if they’ve got graduate or undergraduate degrees in related subjects, to notions like interest rates, zero lower bounds, budget constraints, and so forth. And I’ll also hear about “deficits” and “spending” and “profits.”

Now, all this is funny, sad, and a little tragic. Because what my average American won’t talk about are things which are the most necessary essential that impact the quality of his or her own life. The price of food. The cost of healthcare. The impossibility of retirement. The staggering burden of paying for an education. How are these things doing? Do you see the irony here? Let me make it more precise.

Americans have been taught — indoctrinated, perhaps — to think of the economy as capitalism. Quite literally: if capital returns are high — which is what all the above really measure — then Americans suppose the economy is booming. But capital returns — profits, dividends, stock markets, GDP (or their opposites, deficits) — are not the economy at all. They are just the success of capitalists, at increasing their capital. Hence, the average American — who isn’t a capitalist, since the true capitalists, Bezos, Brin, Buffett, are tiny in number — is cheering on capitalists increasing their capital, but not his own income, savings, living standards, health, longevity, or happiness. Victory for capitalism, comrades!!

LOL — are you beginning to see why I think this is funny and tragic and weird yet? Americans think the economy is a set of abstractions about capitalism — more exactly, capitalists increasing their capital. But they have been systematically warned against thinking of the economy as them: the simple and daily realities of their very own lives — whether or not they can afford food, shelter, medicine, education, save, retire, create, dream, build, grow. Comrades — the victory of capitalism is the victory of us all! You see how ironically Soviet American collapse is.

(Hence, my conversation with the average American might go something like this.

“How’s the economy going?”

“Well, I think it’s going pretty well!”

“Why?”

“Well, the stock market’s booming. Unemployment isn’t so bad. Profits are high! Things are going well!

“So how are they going for you and everyone you know?

“Hmm, not so great”

“How so?”

“Well, everyone I know is living right at the edge. Paycheck to paycheck. We can’t seem to easily afford food, shelter, medicine, education, transport, and retirement — we struggle to pay the bills.”

“That’s where about 90% of Americans are. Did you know that? Aren’t people the economy, or is the economy just capitalism?”

“Wait…”

“Let me ask you again: how’s the economy doing?”)

Maybe the American will make the link I am trying to clarify for him — or maybe he won’t. Do you see the strange and bizarre problem here? Let me make it even clearer.

Capitalism has conditioned Americans to think the economy is capitalists increasing their capital, not raising people’s living standards. Whether or not profits and stock markets are booming, or whether interest rates and deficits are increasing — none of these things hold any meaning whatsoever unless they are denominated in the basic facts of economic existence. Can people afford food, shelter, medicine, healthcare, education, retirement? If not, then such concepts are empty and hollow — they measure capitalism’s success at increasing its capital, but probably only at people’s expense. And that is precisely what we see in America today — people’s lives implode into oblivion, while indicators of capitalists increasing their capital explode off the charts. And the American prole, confused, bewildered celebrates just that — that is what he has been told to do.

The victory of capitalism is everyone’s victory, comrades!! Is it? Or just the victory of the capitalists over the proles? Which one does the American experiment really prove, just like the Soviet experiment before it?

But the economy is not abstract indicators and measures of capitalism’s success. The economy is people’s lives — and whether they are prospering or declining. Capitalism can easily increase its capital by any number of mechanisms — turning people into slaves, peasants, and serfs, starting needless wars, chewing through democracy. But the economy, which is a matter of human well-being, will suffer as a result.

So there is the prole — the average American who will never be a capitalist, because the capitalists are a tiny number, like Bezos and Brin and Musk. And yet instead of considering the price and quality and availability of his staples, his essentials, the things he cannot live without. Food, medicine, shelter, finance, education, and whether the income he is given leaves him able to afford them, he puts capitalists increasing their own capital as the single most important economic objective in an economy above all else. He has been told so often and so hard that the economy is merely abstract measures of capitalism, that he cannot even begin to think the economy is the very things he consumes and produces on a daily basis. In fact, he has never been told otherwise, a single time — he has only ever been told that the economy is capitalists increasing their capital, not him increasing his living standards.

Why is that? It’s because American economics assumed the economy was just capitalism. As I often say, in that way, it has assumed away the problem it was there to solve — “how do we provide prosperity for everyone? Which systems and institutions do it?” Having assumed the answer was capitalism — not investigating whether it actually was, by, for example, comparing Europe and America — American economics was quite naturally then left in the position of concluding that the success of capitalism was all that mattered. If you don’t think the economy is human beings, just capitalism, then all that you really need to do to conclude the economy is prospering is to make sure that capitalism is, and does — even if living standards decline and collapse.

(And that’s what America did. From about 1980 onwards, it launched something like a blitzkrieg on everything that wasn’t capitalism. On government, on unions, on social systems, on norms and value, on jobs and careers. Everything public was made private, everything social was made a market, and everything that wasn’t a commodity was made one — from education to healthcare to retirement, and so on. Having assumed that capitalism was the answer to all economic questions, America embarked on a weird, backwards kind of adventure — it replaced a society with capitalism almost wholesale. Hence, today, Americans pay capitalists eye-watering prices for things that Europeans take for granted, which “socialism”, or more simply, public investment provides.

As capitalism boomed, the economists and pundits and thinkers celebrated. The plan was succeeding! Capitalism was prospering beyond anyone’s wildest expectations. Profits soared. CEO pay exploded. The stock market thundered. Huge monopolies were built to keep the game going. As they showered fortunes on their owners, what few regulations and laws were left were rolled back — we all want capitalism to succeed, don’t we? Because the economy is capitalism.The economy was roaring! Right? Wrong.)

The economy fell apart. The average American’s income had gotten stuck, and now the things of his daily existence, his bread, medicine, shelter, education, retirement, were beginning to increase in price, and fall in quality, every year. He was left impoverished in the end. Capitalism was succeeding, as in capitalists were increasing their capital, beyond their wildest dreams — but capitalism is not the economy. The victory of capitalism is not everyone’s victory — America’s Soviet utopia was not true.

And yet the average American was not just left uneducated about this — he was conditioned against it. He was only told one economic principle, over and over again — the very one he is still told today: his living standards are not the economy, only capitalists increasing their capital is the economy, and therefore, as long as capitalism is succeeding, the economy is roaring, and everything is fine. But note the implication of this logic. If what it takes for “the economy”, which is really capitalism, to go on increasing its capital, is to chew through his life — his savings, his income, his home, his retirement, his opportunity, town, city, community, future — then that is perfectly justified, right, and acceptable. He should celebrate it — because the economy is booming!! That boom will one day shower him with fortune, too.

Do you see the weird, backwards, illogic? It’s something like a bribe. Capitalism promises the proles the glittering rewards that capitalists win — but it has no intention of ever giving it to him. It makes that promise by dazzling him with the idea that the economy is just capitalism — not his daily bread, and that if he needs to give up his daily bread to capitalism, today then he should do it, and that is a small price to pay, because one day, capitalism will make a baron and tycoon of him — it will make a king of everyone, after all.

In this Marx’s false consciousness becomes what later thinkers, like Adorno and Fromm, would have described as the institutionalization of capitalist logic. The prole is now completely in the dark. He has no idea left at all that the economy is anything but capitalism, capitalists increasing their capital. It’s not his daily bread, his medicine, his home, the prices he pays for these things — it’s just how well capitalists do at increasing their capital, and if what it takes is his suffering and misery to do it, then he should happily offer it.

The prole is now something like a mental, cultural, and social hostage to capitalism. The norms of his society, its values, its codes and rules, all reward and reinforce the idea that when capitalists increase their capital, everyone must cheer, and when they don’t, everyone must think of themselves as a failue. The victory of capitalism is everyone’s victory, comrades — and therefore, it is the most important task of all.

So in a society which has institutionalized false consciousness — one like America — the prole cheers when the returns to capital boom, even if his very own living standards fall apart. The truth is that those capital returns are only soaring because the price of his bread and medicine and finance and shelter are skyrocketing, too, while his income is stuck: because capitalists are maximizing their profits. But he has been indoctrinated to think that those things don’t matter, because they are not the economy at all. The prole is now cheering for the capitalists, even as they exploit him. Capitalism, creating the illusion that it is the economy, wholesale, has convinced him that being exploited is morally good for the prole — and will one day be economically good for him, too. Since one day, everyone will be a capitalist, it’s only fair that he should suffer a little, on the road to riches. Now the prole is the instrument of his very own exploitation — and because a society’s norms, rules, values, and codes have all institutionalized the idea that proles being exploited is good for them, how can he escape it?

What the American experiment proves, among other things, is that capitalism as a shared good, joint task, primary objective, for all is just that — a myth. The victory of capitalism is everyone’s victory, comrades! It didn’t turn out that way. The victory of capitalism is just the victory of the capitalists. And that is because capitalism isn’t the economy. The economy is the price of your bread, cheese, beer, medicine, retirement, education. And yet when we think of capitalism as the economy, and it’s victory as ours — as most Americans still do — what power can the average person really have to better his own life? Bang! Therein lies collapse.

Umair
September 2018

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